Credit card users struggling to meet monthly bills

UK credit card customers are still struggling to cover their monthly bills even though the UK economy is showing some signs of recovery. While the headlines across the UK would indicate we are on the verge of an economic recovery, the situation regarding personal debt is one which will drag on for some time to come. Many people have overstretched themselves for the last few years and been at breaking point, in the good times, to cover their monthly outgoings. So how are they coping today?

Even though UK base rates have fallen to a historical low of 0.5%, and appear set to remain at this level for some time, UK credit card rates have moved higher and higher. Quietly, UK credit card companies are squeezing their customers to try and claw back as much money as possible which they have lost to the bad debtors. This is in turn causing more problems for those who were "comfortable" prior to the rate rises and creating something of a vicious circle in the UK credit card industry.

When you also consider that inflation is now making a comeback and the cost of living in the UK is set to move higher in the short to medium term, it would appear that more people will be squeezed harder in the short to medium term and bad debts in the credit card industry could continue to rise for some time to come.